SCOPE OF CHALLENGE TO CONCILIATION SETTLEMENT
The conciliation settlement agreement has the similar position and effect as if it is an arbitral award on approved requisites on the subject matter of the dispute rendered by an arbitral tribunal under section 30 of the Arbitration and Conciliation Act, 1996. Section 36 of the Act provides that the arbitral award shall be enforced under the Code of Civil Procedure, 1908 in the same approach as if it were a decree of the Court after the time for making a submission to set aside the award under section 34 of the Act has expired, or such application having been made, it has been refused. Reasonably talking there seems to be no justification for allowing a petition for setting aside an arbitral award on agreed terms but under the law as it stands no exception is engraved out for an arbitral award on settled terms. An argument consequently may be advanced that section 36 is applicable to all arbitral awards, including an arbitral award on agreed terms. Consequently a petition for execution of an arbitral award on agreed terms cannot be filed except the time for making an application to set aside the award under section 34 of the Act has expired. The necessary consequence is that a petition for setting aside of an arbitral award can also be preferred. This argument may be resistant by the absence of any exception clause in section 34 of the Act with respect to an arbitral award on agreed terms. Since by a legal literature a conciliation settlement agreement is to be deemed as an arbitral award on agreed terms, a petition under section 34 of the Arbitration and Conciliation Act, 1996 cannot be said to be outside knowledge in respect of a conciliation settlement agreement. In case such a petition is entertained, that would unswervingly affect the enforceability of a conciliation settlement agreement and resultantly gives a severe blow to the efficacy of conciliation proceedings.
Interpretation in the other course can offer one likely solution. A lawful literature treats a conciliation settlement agreement as an arbitral award but there is nothing in the Act which in such cases compel the court to consider conciliation as arbitration or a conciliator as an arbitral tribunal and consequently even if such a petition is filed it would be constrained to only two grounds viz. failure of the parties and the award being divergent to communal policy thus preventive the extent of any such challenge. An additional potential resolution of this subject matter would be to alter the Arbitration and Conciliation Act, 1996 by given that in section 36 of the Act that an arbitral award on settled terms a conciliation settlement agreement would be enforceable without delay. On the other hand, unquestionably the procedure of conciliation from the stage when one party enters applies for conciliation to the stage of final termination of proceedings is likely to take some time. The time duration may extend even to a few months also, which might result in extinguishment of the limitation period and secondly by specifying that section 34 of the Act would not be appropriate to an arbitral award on agreed terms/ a conciliation settlement agreement. This would preclude the opportunity of any kind of confront to a conciliation settlement agreement.